MLS listed mid-sized apartments - getting the financials, etc.

8 Replies

New to RE investment. Focusing on syndicating 20 units or larger apartment buildings. Trying to build network of brokers with knowledge of off market apartments. Loopnet is a vast wasteland in this market (Montana / Wyoming) so I'm looking on MLS until I start finding off market deals.

I'm finding properties that "might" have possibilities. Some listings have been on the market for well over a year and the listing brokers are acting stunned when I ask for financials, rent rolls, vacancies, etc. The obvious question is, "how do these people expect to make sales without being professional?" Prepared to present the property? Do the owners of these buildings think that someone is just going to show up and write a check for the asking price? Without having a clue as to whether the building is an investment or not?

Is there a best way of dealing with these 'teaching moments on two legs'?

Thanks for allowing me a little rant. It's been a frustrating few days. If this is the worst, I'm good. But, Damn!

@Joe G Rampy I understand what you mean. My wife and I have been looking at smaller multifamilies in the Butte and Bozeman/ Belgrade areas. Our realtor in Belgrade is awesome and knows exactly what we are talking about when we ask, but when it came to the butte market we found that dealing with a newer realtor was better, as they would not look at us crosseyed when we asked for those same things.

The duplex in Belgrade we recently bought was overpriced in the beginning, because the selling realtor actually thought, and I quote " I figured I could find a cash buyer to just write a check". He was an idiot.

Good luck Joe!

"I signed a contract to sell a property. You mean I am expected to know what I am selling too? Oh that's going to cost you more. What? you want to to make it presentable ? That's really going to cost you more. You also want me to make sure its safe? I think its against the law for me to do that" heheheheheheh:)

I run into this all the time especially with properties that have been on the market for a while. The longer the property has been on the market the less the agents or broker will know about it. 

They say , " there is a sucker born every minute". I guess the brokers and agents are just waiting around until the sucker comes in wanting to buy a building from them so they can get their full commission. 

I have found this backwards also.  Many of our listings, say right in them, "financials available with an accepted offer".  This makes no sense to me.   I guess they are expecting a solid offer and then once you get a chance to really look at a place and really run the numbers then you give them a reasonable offer.  In some ways single family homes are like that in that we make an offer based upon what we can see, have an inspection done and then we renegotiate.  I prefer not play with sellers and really only enter into a contract if I am serious about it.  I also for my sellers suggest an inspection before you sell so that there is no, renegotiation after the accepted offer.   Some may see it as backwards, I see it as smart.  In the end I guess we will see which way is more profitable?

@Mike Baker Hey Mike. I need to get over there for a cup of coffee soon. Share some viewpoints over some joe. I may call you early next week.

@Gilbert Dominguez I will suggest that there are a lot of MF properties on the market for an extended period of time BECAUSE the brokers do not put forth the EFFORT to LEARN how to sell/market them.

@Shelli Callan When you speak of language in listings and sales contracts, I hope you realize that Montana has a somewhat dated government/business environment. Like 19th century dated. That standard listing language probably carries the power of the law if someone wanted to make a point. The Copper Kings may not hand out cash favors on the floor of the State House and Senate anymore, but things still get written into law that wouldn't survive the light of day in most other states. From my own experience, the greatest offenders are the state realtor association, the property management association and everyone involved with alcoholic beverages. That's not to say that the farming and ranching community is asleep at the wheel. With only a million residents, a little money can buy a lot of influence. There are a lot of inbred mindsets that do nothing to aid progress.

Although I'm new to the RE business, I have over 40 years of multinational sales and marketing management background in the information technology and oilfield equipment and services business. When I encounter a broker who has had a listing for a business for almost two years and hasn't bothered putting together the most basic presentation to prove that it really is a viable business, I become physically ill. Success will always be when preparation meets opportunity. Luck is too large a variable to count on. In the particular case I referred to above, the broker would have had to sell 7 or more $400K SFH to surpass the commission she would earn if she put a little effort into being prepared to sell the MF business about which I inquired. Whose money and time is she wasting? Her own? The Seller's? Not mine, for sure, because I won't let that happen. Even in a small market like Montana, there is always another deal down the street to analyze.

In SFR sales, you're always selling features like a view, a gourmet kitchen, a garden bath, walk-in closets, etc. In MF sales, you have to prove that the property will cash flow from Day One. Maybe not always, but if I can't see where the cash flows beyond expenses; where the value-add increases my investors' return in 3-7 years. You won't see an offer from me that your seller will like.

And to address your last comment; there is no profit for the broker or the seller if there is no sale. Carpe Diem!

On a separate note regarding being prepared: Several years ago, before he sold The Staubach Company, I have a close personal friend who worked as one of Roger Staubach's assistants for over a decade. Through her, I learned many things about what makes an extraordinary commercial real estate enterprise. One that sticks in my mind is that in the office buildings where he and/or his team worked, he had cell phone repeaters installed in the elevator shafts of both the office buildings and the attached parking garages. He understood that a missed call or a dropped call could cost his business 7 or 8 figures on any given day. That's preparation.

@Joe G Rampy in the markets you are searching there are at the most one or two brokers that know the MF market in each community. For one reason or another properties sometimes get listed with someone else who has a license (but knows little to nothing). The owners are often fiercely independent and very private. They don't want their neighbor calling the listing broker and getting their personal financial information. They sometimes make hundreds of thousands of dollars a year but live just like their neighbors (lower middle class lifestyle) and don't want others to see them differently. They want to know who wants to know before they show their hand. It's a different mindset. I have found that you can request a rent roll and use those to get an idea if the property is priced somewhere near what I would pay. If you want to find deals in those markets you have to work harder. It's mostly because the agents don't really know what they don't know. They don't want to look bad to the seller by requesting the information that they feel the seller doesn't want to give out. Sellers are often tight lipped and have the attitude "it made money for me" so it'll make money for you so you can pay my price or buy something else.

Bill - great synopsis.

@Bill S. As I said, I'm new to this. The "personalities" I've dealt with over the past few decades were not of the "buckaroo" genus. So, the responses I've received caught me off-foot. Learning and adjusting going forward.

Thanks for reading.

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